Pengana International Equities Surges 189% Profit, Boosts Dividends Fully Franked at 30%

Robust Half-Year Financial Performance

Pengana International Equities Limited (ASX: PIA) has unveiled a substantial leap in profitability for the half-year ended 31 December 2024, posting a net profit after tax of $26.9 million. This represents a remarkable 189% increase compared to the $8.9 million reported in the same period last year. Earnings per share surged to 10.48 cents, up from 3.47 cents, reflecting strong operational momentum and effective portfolio management.

The company’s investment portfolio, managed by Harding Loevner under Pengana Investment Management Limited, delivered an 11% return net of fees and expenses. This performance underscores the firm’s focus on high-quality, ethically screened global businesses positioned to benefit from secular growth trends, while maintaining resilience against economic cycles.

Dividend Policy and Shareholder Returns

In line with its stated dividend policy, Pengana declared two interim dividends of 1.35 cents per share each, both fully franked at 30%, marking an increase in franking credits from 25% in the prior year. The first interim dividend was paid on 16 December 2024, with the second declared on 21 January 2025 and scheduled for payment on 17 March 2025.

The company’s Dividend Reinvestment Plan (DRP) remains active, with nearly half a million new shares issued during the period. To mitigate dilution from the DRP, Pengana has executed an on-market share buyback, effectively neutralizing the impact of additional shares issued through dividend reinvestment.

Balance Sheet Strength and Asset Quality

Pengana’s net tangible assets (NTA) per share before tax on unrealised gains stood at $1.37 as of 31 December 2024, up from $1.28 a year earlier. After tax, the NTA per share was $1.23, reflecting a solid balance sheet foundation. The company’s assets predominantly consist of listed investments valued at $369.7 million, with cash and receivables providing liquidity buffers.

Operating expenses and management fees remained well controlled, with total expenses of $2.24 million, supporting the company’s ability to deliver strong net returns to shareholders.

Strategic Outlook and Market Positioning

The board highlighted the current market environment, noting that the narrow concentration of recent share market returns has created attractive valuations for high-quality growth stocks. This environment offers Pengana’s bottom-up fundamental investment approach opportunities to outperform over the long term. The company continues to emphasize diversification across sectors and geographies to manage valuation risks effectively.

Looking ahead, the after-tax NTA per share increased modestly to $1.39 as of 7 February 2025, signaling ongoing portfolio appreciation early in the new calendar year.

Governance and Compliance

Pengana’s half-year financial report was independently reviewed by Ernst & Young, who confirmed compliance with Australian Accounting Standards and the Corporations Act 2001. The board remains confident in the company’s ability to meet its financial obligations and sustain its investment strategy.